2020 Social Impact Assessment

Considering the social costs and benefits of gambling within the Hauraki District Version 1.0 Prepared by Strategic Planner Created 10 February 2020 Adopted xx Doc ID 2719784

2

Table of Contents Introduction ........................................................................................................................................... 3

Gambling in New Zealand ....................................................................................................................... 4

General gambling participation ..................................................................................................................... 4

Non-casino gaming machines ........................................................................................................................ 4

Player winnings from gaming machines .................................................................................................... 5

Gambling proceeds and turnover .................................................................................................................. 6

Non-casino gaming machine proceeds ..................................................................................................... 6

TAB racing and sports betting proceeds .................................................................................................... 7

Gambling in the Hauraki District ............................................................................................................. 8

Risk profile ..................................................................................................................................................... 8

New Zealand Racing Board venues ............................................................................................................... 8

Class 4 gaming ............................................................................................................................................... 9

Density of venues ...................................................................................................................................... 9

Location and accessibility of venues ....................................................................................................... 10

Spend and proceeds .................................................................................................................................... 11

Social benefits of gambling ................................................................................................................... 13

Entertainment ............................................................................................................................................. 13

Employment opportunities ......................................................................................................................... 13

Community funding ..................................................................................................................................... 13

Nationally ................................................................................................................................................. 13

In the Hauraki District .............................................................................................................................. 14

Social costs of Gambling ....................................................................................................................... 18

Problem gambling........................................................................................................................................ 18

Mitigating problem gambling ...................................................................................................................... 18

Impacts of problem gambling ...................................................................................................................... 20

Abuse and violence associated with problem gambling ......................................................................... 20

Attitudes and perceptions around gambling ........................................................................................... 21

Problem gambling in the Hauraki District ................................................................................................... 21

2014 Hauraki gambling forum ................................................................................................................. 22

2017 stakeholder feedback received ...................................................................................................... 24

Conclusion ........................................................................................................................................... 27

References ........................................................................................................................................... 29

APPENDIX A - Venue locations: NZ Deprivation Index 2013 – Ward and District ..................................... 31

Introduction The Council must adopt a policy on class 4 gambling venues in accordance with the Gambling Act 2003. The policy must specify whether or not class 4 venues1 may be established in the district and, if so, where they may be located. The policy may also specify restrictions on the maximum number of gaming machines that may be operated at a class 4 venue and may specify whether venues can relocate in the district. The Council must also adopt a racing board venue policy in accordance with the Racing Act 2003. The policy must specify whether the New Zealand Racing Board may establish new stand-alone TABs (i.e. the policy does not deal with TABs in pubs and clubs) in the district and, if so, where they may be located. In adopting each of these policies, the Council must have regard to the social impact of gambling within its district.2 This 2020 Social Impact Assessment (the Assessment) seeks to discuss the social impact of gambling in New Zealand and more specifically for the residents of the Hauraki District. The Assessment will be considered for the review of the Hauraki District Council’s Class 4 Gambling Venue and Racing Board Policy (the Policy) and should be read in advance of discussions regarding the review of the Policy. For the purposes of informing the Council’s policy review, the Assessment provides an overview of: • gambling at a national level, • gambling machine and gambling venue statistics at the local level, • the social benefits from gaming machines, and • the social costs from gaming machines. Information for this Assessment has been gathered from a number of sources including: • Ministry of Health (MOH), • Problem Gambling Foundation of New Zealand (PGFNZ),3 • Racing Industry Transition Agency (RITA) • Population Health (Waikato District Health Board), • the Department of Internal Affairs (DIA), and • Health Promotion Agency (HPA).

1 Class 4 gambling is defined in the Gambling Act 2003 and includes non-casino gaming machines e.g. pokie machines. 2 Gambling Act 2003, s 101 and Racing Act 2003, s 65D 3 Information was provided by PGFNZ in March 2020 and is based on figures collected by PGFNZ over the January 2019 to December 2019 period. This data is from grants published by the contributing pokie Trusts, Statistics released by the DIA to December 2019 and the 2018 census from Statistics NZ. PGFNZ cannot guarantee that all grants that have been made under the class 4 legislation have been included in the list. Therefore, the grants should be taken as an overview only.

4

Gambling in New Zealand General gambling participation A significant amount of adults in New Zealand gamble4 at least occasionally. The 2018 Health and Lifestyles Survey5 found that: • 67.2% of the adult population had participated in some form of gambling during the past year;

which is an estimated 2,650,000 adults. • This is keeping with the generally downward trend which has seen gambling participation

decrease from 82.7% in 2006. • 11.3% played gambling machines or pokies at a pub or club over the last year (down from 18.5%

in 2006) with 1.3% of those at least once a week (down from 2% in 2006). • 3.8% participated in gambling through TAB at least once a month (down from 4.2% in 2006). • Using the Problem Gambling Severity Index6 61.7% of respondents were considered non-problem

gamblers (down from 72.2% in 2010), 3.6% were considered low risk gamblers (down from 6.0% in 2010), 1.9% were considered moderate risk and problem gamblers (down from 3.1% in 2010).

Non-casino gaming machines The Gambling Act 2003 provides for class 4 gambling (non-casino gaming machines) to be permitted only where it is used to raise funds for community purposes. Venues (pubs and clubs) may choose to host gaming machines in order to offer customers a range of entertainment at their pub or bar. Some people believe that a venue with gaming machines may attract more customers, who may drink more and so increase the bar business. Anecdotal evidence suggests, however, that gaming machine users at pubs tend not to drink very much alcohol. Gaming machines may also actually deter some customers from going to the bar.7 Money that is deposited into gaming machines can be divided into two categories; player winnings and gaming machine proceeds. For every $1 that is put into a gaming machine, on average 92 cents is allocated to player winnings and 8 cents to gaming machine proceeds, as displayed in Figure 1. The system is designed with the intention that venues operating the gaming machines break even in terms of their associated costs and their share of the gaming machine proceeds.

4 Gambling activities include placing a bet with the NZ TAB on a horse or dog race or a sporting event, buying any NZ Lotteries Commission (Lotto) products, playing on gaming (pokie) machines in a pub, club or casino, playing table games at one of the six casinos, playing housie or bingo, playing an internet game to win money, buying a raffle ticket, participating for money in sweepstakes with friends, family or workmates, making bets for money with friends or family, placing a bet or buying tickets through an overseas online website. 5 (Health Promotion Agency, 2020) 6 (Ferris & Wynne, 2001) 7 (Department of Internal Affairs, 2015)

5

Figure 1: Allocation of funds deposited into gaming machines (Based on the Lion Foundation Distribution Model, April 2013-March 2014)

Player winnings from gaming machines The following extract shows the percentages of winnings returned to the patron. Regulations enforced by the DIA set the return to player percentages: “The theoretical return to player (RTP) has to be set between 78% and 92%. This is a theoretical return to player over the life of the machine (millions upon millions of ‘plays’). In theory, at a 90% RTP a patron is only losing around 10 cents in each dollar (10%) wagered. However, a simple reading of this sentence does not take into account the ‘churn’ factor. That is, someone puts a dollar into a machine, and after their first wager they get 90 cents back. Then they make another wager, and lose 10% of that, so have 81 cents left. Then they wager again, and have 73 cents left and so on. People may wager their wins, or chase their losses.”8

8 (Ministry of Health, 2009)

92¢ allocated to

player winnings

•Not necessarily the player that put the money into the machine

•Those winnings are often redeposited into the machine

8¢ gaming machine proceeds

•2.6¢ goes to the Government in the form of duty and GST

•1.1¢ goes to the venue•1.1¢ goes to machine costs•0.5¢ goes to overheads•2.7¢ goes to grants

Proceeds of gambling refers to the amount spent (lost) by participants. It is also each operator’s gross profit from

their gambling products.

Turnover refers to the actual amount of money that is deposited by gamblers.

6

Gambling proceeds and turnover The proceeds in New Zealand for the four main forms of gambling (TAB racing, casinos, lotto and non-casino gaming machines) in the 2017/18 financial year was approximately $2.4 billion9, which is $49 million (2%) more than the previous year. More was spent on all forms of gambling, though gaming machines (outside of casinos) had the largest increase.

Non-casino gaming machine proceeds The proceeds from non-casino gaming machines increased 3.1% from $895 million in 2018 to $924 million in 2019. After adjusting for both inflation and changes in the adult population, however, it appears that expenditure on non-casino gaming machines is actually declining slightly from $242 per person in both 2015/16 and 2016/17 years to $238 in the 2017/18 year10. This coincides with declining numbers of venues and machines.

($000,000)

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Gaming machines (outside casinos)

Proceeds (losses) $856 $854 $827 $806 $818 $843 $870 $895 $924 Prizes $8,365 $8,395 $8,166 $7,976 $8,141 $8,550 $8,931 $9,154 $9,440 Turnover $9,222 $9,245 $8,995 $8,783 $8,949 $9,393 $9,801 $10,049 $10,364

Table 1: Reported non-casino gambling proceeds from 2010/11 to 2017/18 (non-inflation adjusted)

From the proceeds, the corporate societies that manage gaming machines must only pay: • The actual, reasonable and necessary costs (including prizes), levies and taxes incurred in

conducting the gambling. • The actual, reasonable and necessary costs incurred in complying with the Gambling Act 2003 (the

Act) and licences issued under the Act. All other money must be applied or distributed to authorised purposes.11 To ensure that proceeds to the community are maximised, the Secretary for Internal Affairs may set limits on the costs that may be incurred by a corporate society.12 The breakdown of how proceeds are intended to be allocated is shown in Figure 2.

9 (Department of Internal Affairs, 2020) 10 Figures not available for 2018/19 yet for per person spend 11 Charitable and non-commercial purposes, as defined in the Gambling Act 2003. 12 (Department of Internal Affairs, 2016)

7

Figure 2: Allocation of gaming machine proceeds – Department of Internal Affairs13

TAB racing and sports betting proceeds The proceeds from TAB racing and sports betting increased 3.4% from $338 million in 2016/17 to $350 million in 2017/18. This was driven by higher active customer numbers of 230,000 (placed a bet in 2017/18), an additional 38,000 additional customers. 14However, after adjusting for both inflation and changes in the adult population, expenditure on TAB racing and sports betting decreased from an average of $94 per person in 2016/17 to $93 per person in 2017/1815.

($000,000)

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

NZ Racing Board (TAB)

Proceeds (losses)

$273 $283 $294 $310 $325 $342 $338 $350 $332

Prizes (dividends)

$1,261 $1,336 $1,422 $1,522 $1,748 $1,928 $1,907 $1,913 $1,926

Turnover $1,533 $1,619 $1,717 $1,833 $2,073 $2,270 $2,245 $2,262 $2,258

Table 2: Reported TAB gambling proceeds from 2010/11 to 2017/18 (non-inflation adjusted)

In accordance with the Racing Act 2003, the New Zealand Racing Board must allocate the funds received from sports betting as follows: • refunds of bets and winning dividends for that year • goods and services tax (GST)

13 (Department of Internal Affairs, 2016) 14 (New Zealand Racing Board, 2018) 15 Figures not available for 2018/19 yet for per person spend

Minimum distribution of authorised

purposes (community grants etc)

40.00%

Gaming duty23.00%

Problem gambling levy1.51%

Maximum venue payments

16.00%

Society expenses19.49%

ALLOCATION OF CLASS 4 GAMING MACHINE GROSS PROCEEDS (excluding GST)

8

• totalisator duty as prescribed by the Gaming Duties Act 1971 • any amounts agreed to be paid to New Zealand national sporting organisations • its own operating costs. The surplus, if any, after meeting the above costs must be distributed among racing codes, however some could be held in reserves by the Board.16

Gambling in the Hauraki District Although measurement tools are improving, local statistics relating to problem gambling continue to be hard to come by; therefore, this report relies on both anecdotal evidence given at the forum held in March 2014 and both verbal and written feedback provided by the different organisations mentioned above.

Risk profile In 2013, KPMG in conjunction with the Ministry of Health (MOH) released guidance for local government in establishing their risk profile when it comes to gambling.17 The risk profile considers the following factors: • Gambling prevalence rate – number of people in the District that have sought help in comparison

to national statistics • District gambling density – number of gaming machines per person and expenditure per person • District ethnicity – percentage of Māori/Pacific population • Community deprivation – based on the NZDep2013 deprivation index • Availability of services to help – intervention services available in the district. When calculated, the risk profile generates a score by which the overall level of risk for a District can be classified as low, medium, or high. The Hauraki District risk profile is medium based on calculations made on these parameters.18 The recommended policy option that may suit a medium risk district is a policy with restricting locations or restricting locations and numbers of machines.

Factor Hauraki District score Weighting Total score Prevalence rate 1 (low risk) 2 2 Gambling machine density • # machines per 10,000 • expenditure per person

2 (medium risk) 2 (medium risk)

1 1

2 2

District ethnicity • Māori • Pacific

3 (high risk) 1 (low risk)

1 1

3 1

Community deprivation 3 (high risk) 1 3 Availability of services 2 (medium risk) 1 2

Total points 15 Risk rating Medium risk

Table 3: Hauraki District’s risk profile scores.

New Zealand Racing Board venues At the 2014 forum, the representative for NZRB contended that racing/sports betting is very different from gaming machine gambling. Advertising for venues is very minimal and of all the people who present as problem gamblers, only 8% have an issue with horse betting and 2% with sports betting. “Comparing the gambling participation and expenditure information confirms that most of the money

16 Racing Act 2003, s 15-17. 17 (KPMG, 2013) 18 Prevalence rate and gaming machine density calculations based on the Census 2018 usual resident adult population (18 years and over) in the Hauraki District.

9

spent on gambling in New Zealand comes from relatively limited number of people who play non-casino or casino gaming machines, or both. This has been the case for more than a decade.”19 The Council has had an open policy in relation to TAB venues for the past three review periods, and it has been previously suggested by the NZRB (now RITA) in 2014 that this open policy remained appropriate.20

Class 4 gaming The Council’s current policy is to restrict the growth of gambling by capping the number of class 4 gambling venues, and capping the total number of gaming machines in the Hauraki District.

Density of venues Table 4 shows the number of gaming machines currently operating in the Hauraki District (as at 30 September 2019).

Society Venue Town Number of gaming

machines

Maximum gaming

machines New Zealand Community Trust Bayview Hotel Kaiaua 5 5 Grass Roots Trust limited Ngatea Hotel Ngatea 15 15 Ohinemuri Club Incorporated Ohinemuri Club

Incorporated Paeroa 12 12

Akarana Community Trust One3one Bar & Kitchen Paeroa 18 18 First Sovereign Trust Limited Paeroa Hotel Paeroa 12 12 First Sovereign Trust Limited Commercial Hotel Waihi 18 18 The Lion Foundation (2008) Rob Roy Hotel Waihi 18 18 The Lion Foundation (2008) Sterling Tavern Waihi 12 16 Waihi Memorial RSA (incorporated)

Waihi Memorial RSA Inc Waihi 9 9

Total 119 123

Table 4: Societies and venue holders in the Hauraki District as at 30 September 2019

All venues in the Hauraki District have their maximum allowed gaming machines with the exception of the Sterling Tavern in Waihi, which may operate another four machines without the Council’s consent. This is because venues that held a licence on 17 October 2001, and have not been without a licence for six months or more are restricted to the number of machines they reported on 22 September 2003, unless they get Council consent to operate more.21

As noted on Table 4, there are 119 gaming machines in Hauraki, in nine venues. This is the same as the number of machines the Council recorded in 2011, 2014 and 2017 when reviewing its Class 4 Gambling and Racing Board Venues Policy. The number of gaming machines has remained constant over the past eight years, with the exception of the quarter ending September 2013 due to the closure of both Fathers Tavern in Paeroa and Ngatea Hotel in Ngatea. The Ngatea Hotel reopened in

19 (Ministry of Health, 2019) 20 (Hauraki District Council, 2014) 21 (Department of Internal Affairs, 2015)

Hauraki District has 119 gaming machines in nine venues.

Using the 2018 Census adult

population (18+) of 15,519 this equates to 0.008 gaming machines per person in the Hauraki District.

10

the following quarter with the same number of machines and One3One Bar & Kitchen opened in the place of Fathers Tavern in Paeroa, retaining the same number of machines.

Figure 3: Gaming Venue and Machine numbers, combined with proceeds by District, Department of Internal Affairs

The proceeds from gambling in the Hauraki District have slowly increased over the past four years, while the number of venues and machines has remained static. It is important to note however that since the 2013 Census the Hauraki District total population has increased from 17,811 to 20,022 .22 In addition, national statistics show that the unemployment rate has reduced in the past five years and household income has increased.23 The Ministry of Health Gambling Resource for Local Government states that: “research has shown that capping or reducing the number of electronic gaming machines is likely to lead to reduced harm. The study found that there is an average increase of 0.8 problem gamblers for each new electronic gaming machine introduced... these findings indicate that policies related to restricting or reducing the density of electronic gaming machines are likely to play a significant role in containing or reducing gambling-related harms.”24 However more recent studies undertaken find that “it is difficult to establish a correlation between reduction of gaming venues and expenditure. Limiting access has been a primary component of the approach to minimise harm, but there is no compelling evidence that reductions in venues created through policies such as linking lid have an impact. This could be due in part to the minimal reductions not sufficiently impacting on accessibility.25”

Location and accessibility of venues The influences that the location, accessibility and density of gambling venues have on participation, expenditure and rates of problem gambling in the community are complex. It is 22 (Stats NZ, 2020) 23 Statistics New Zealand Labour Market Statistics (released June 2018) 24 (Storer, Abbott, & Stubbs, 2009) 25 (Rook, 2018)

$0.00

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

$1,400,000.00

$1,600,000.00

0.00100.00200.00300.00400.00500.00600.00700.00800.00900.00

1000.00

Gaming venue and machine numbers and proceeds in the Hauraki District

Venues Machines Gaming machine proceeds

Gambling venues are more likely to be located in areas of

high deprivation and low income areas where more Māori and Pacific people

reside.

11

noted that living closer to gambling venues had previously been associated with being more likely to be a problem gambler. This is due to greater participation in gambling being influenced by the distance to the nearest venue.26 APPENDIX A - Venue locations: NZ Deprivation Index 2013 – Ward and District shows maps provided by Waikato District Health Board (Population Health) confirming that for the Hauraki District the majority of gaming machine venues are located in decile 8-10 areas. A value of 10 indicates that an area is in the most socio-economically deprived 10% of areas in New Zealand and a value of 1 represents the least deprived 10%. Waikato District Health Board (Population Health) noted in a 2014 briefing paper provided to the Council that:

“Inequality embedded into current policy or just not prevented by policy has seen gambling venues proliferate in areas of deprivation and in proximity to Māori and Pacific peoples who reside disproportionately in these areas… Policies that restrict or reduce the density of pokies are likely to play a significant role in mitigating gambling related harm. Council has the statutory ability to influence the outcomes of gambling on the community.”27

There was concern from the NZRB at the 2014 forum that if gaming machines were closed down that people may go to “other forms of non-regulated gambling such as online gambling”. It was also stressed that at least the gaming machine venues are regulated and support/help is at hand when problems arise, whereas online gambling is available in the private home, further submerging the problem.28

Spend and proceeds Gaming machine proceeds (GMP) is the profit made by the pokie machines and does not reflect the true allocation of monies going into the machines (the turnover). Turnover is not calculated at a district level as it’s difficult to determine the actual amount of money being spent in machines. This is because a $10 outlay can result in a win (say $9) which is then put back into the machine, and then a $4 win again is put back into the machine. Therefore, only $10 is spent, but $21 is actually put into the machine. Gaming machine net proceeds in the Hauraki District are further detailed in Figure 4, showing the annual gaming machine proceeds by quarter. The total proceeds annually from 2016 to 2019 in the Hauraki District were: • $4,597,242 in 2016 • $4,893,786 in 2017 • $5,243,728 in 2018 • $5,340,410 in 2019

26 (AUT Gambling & Addictions Research Centre, 2012) 27 (Kristensen, 2013) 28 (Hauraki District Council, 2014)

12

Figure 4: Gaming Machine Proceeds by District, Department of Internal Affairs29

The quarterly gambling loss per head is calculated by taking the population 18 years and over and dividing it by the latest expenditure figures published by the DIA. The population figures come from the 2018 census and the expenditure for the period is taken from the most recent DIA statistics.30

Figure 5: Quarterly loss per head to gaming machines in the Hauraki District

Gambling loss per head of population continues on the upward trend in Hauraki (not adjusted for inflation) this is despite static numbers of gaming machines and venues. This is consistent with the national trends that although the number of those participating in gambling is down the amount being spent is increasing each year.

29 (Department of Internal Affairs, 2020) 30 (Department of Internal Affairs, 2020)

$1,069,152.99 $1,163,172.94 $1,197,193.32 $1,238,149.65

$1,134,355.92 $1,219,789.68 $1,310,510.47 $1,304,040.47

$1,184,231.23 $1,278,370.69

$1,400,362.69 $1,340,644.87

$1,209,502.00 $1,232,452.65

$1,335,661.27 $1,391,683.80

$0.00

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

2016 2017 2018 2019

GAMING MACHINE PROCEEDS - HAURAKI DISTRICT

January to March April to June July to September October to December

$65.00

$70.00

$75.00

$80.00

$85.00

$90.00

$95.00

Hauraki District loss per head to gaming machines (quarterly)

Loss per head Linear (Loss per head)

13

Social benefits of gambling Gambling can benefit communities by way of community funding, employment opportunities and simply as a form of entertainment.

Entertainment Gambling is often a harmless entertainment activity from which people derive personal enjoyment and positive social effects. For a significant number of adults over the age of 65 years gambling has become a form of recreation and entertainment.31 Research has found that socialising, enjoyment, and fun are directly related to communal activities such as housie and community raffles. Based on these findings, there is a clear view that people genuinely enjoy participating in gambling activities, and there are benefits of being able to socialise with others, particularly whānau members.32

Employment opportunities Each society and venue’s operating costs and maintenance of machines are paid from the proceeds of gaming machines. In addition, their costs to meet requirements of the Gambling Act are met from the proceeds of gaming machines. This includes the staff needed to carry out these functions.

Community funding There are two types of society that operate class 4 gaming machines: • Those that apply funds to their own purposes (e.g. clubs) • Those that make grants to other bodies for community purposes. Currently, these societies are legally required to allocate a minimum of 40% of gross proceeds back into the community, as shown in Figure 2. The societies do not necessarily advertise the availability of funding; however, they are required to advertise the beneficiaries annually. At the forum with stakeholders in 2014, it was noted that New Zealand is one of the only countries that has gaming funding for community gain, not commercial gain as is the case in most other countries.

Nationally Hundreds of millions of dollars are returned annually to the community from the proceeds of gambling on electronic gaming machines or pokies in pubs and hotels.33 Communities in New Zealand benefited from an estimated $749 million, equal to 31.4 per cent of gambling expenditure in 2017/18, for various purposes. This was an increase on the $722 million in 2016/17. • The New Zealand Racing Board allocated $161 million ($147 million in 2016/17), mostly to support

racing club activities and infrastructure; • Non-casino gaming machine trusts raised an estimated $295

million (291 million in 2016/17) for authorised purposes; • Non-casino gaming machine clubs raised an estimated $46

million (45 million in 2016/17) for their own purposes.34 Since the introduction of Class 4 gambling legislation there has been a stronger reliance on gambling funds to support community and sporting activities. Community capability in using more traditional fundraising methods and/or developing innovative ways to raise funds can be undermined alongside this reliance on gambling funding. To demonstrate this point, a study by ‘point research’ commissioned by Auckland City in 2012, found that quite

31 (Problem Gambling Foundation of New Zealand, 2009) 32 (KPMG, 2013) 33 (Department of Internal Affairs, 2015) 34 (Department of Internal Affairs, 2020)

The existence of class 4 gaming means that

employment opportunities exist for the societies

administering the gaming machines, venues operating

them and the servicing industries.

14

a few organisations thought they would struggle to find an alternative source of funding if they were no longer able to source gaming trust money; some said they would cut back their activities and others said they would be forced to shut down. It is important to note that due to the volunteering nature of a lot of workers in these organisations, the availability of time to look for alternative fundraising is limited; grants are therefore an important source of funding for many organisations with limited resources.

In the Hauraki District The proceeds from gaming machines provide significant funding for a large number of community projects both nationally and within the Hauraki District. Each society and trust has its own funding criteria and it is here that the distribution (back to the community the money was raised in, or otherwise) is decided. Two of the venues in the Hauraki District (the Waihi RSA and the Ohinemuri Club) own the rights to spend profits back into their own club as ‘member’s comforts’ along with (in the RSA’s case) national distribution. During the 2014 forum, NZCT stated that their main reason for gaming machines was to be able to provide funding to community groups and organisations where this was a key portion of their funding and where there was limited available time to fundraise via alternative avenues due to most of the workers in those sectors being volunteers. NZCT believes “when considering the future of this community funding it is important to look at both sides of the equation. NZCT funding benefits many thousands of people per year. In the long term, reducing the number of gaming machines operating will inevitably decrease the revenue they generate for your community.” In terms of the ‘causes’ that are supported by the gaming machine grants, the education sector received the highest value of grants ($183,866.06) for the January 2019 to December 2019 period35. This was followed by community groups who received ($75,822.82) as shown in Figure 7. The biggest single donation in this sector went to Hauraki Plains College receiving $30,000. Overall the Hauraki Plains College was the most benefiting recipient, receiving $66,067.06. The next benefitted recipient was the Mangatangi School. receiving $43,757.00. For the Community Groups, the biggest overall amount went to Goldfields Railway receiving $19,533.00 for the period36. Figure 6 shows the funding allocated to the Hauraki District in the period January 2019 to December 2019.

35 This data was provided by PGFNZ of what was available for the 2019 year for published grants. Due to some grants periods falling across years this will not include some grants that will fall into either the 2018 or 2020 year. It also does not include grants that are from recipients that work across districts such as Thames Valley sports teams. This data should be considered as an overview only. 36 (Aitken, 2020)

Contrary to public opinion, the proceeds from gaming machines are not required to be distributed back into

the same community in which they were generated.

15

Figure 6: Grants to the Hauraki District January 2019 to December 2019 sorted by type

The Hauraki District received 57 individual grants between January 2019 and December 2019 as provided by the PGFNZ.37

Society Machines in the Hauraki District

Dates Grants to the Hauraki District

One Foundation 30 Jan 2019 – Sep 2019 $114,704.03

Grassroots Trust 15 Jan 2019 – Dec 2019 $110.432.23

Lion Foundation (2008) 30 Jan 2019 – Sep 2019 $96,833.00,

The Akarana Community Trust 18 Jan 2019 – Sep 2019 $53,875.92

NZ Community Trust 5 Jan 2019 – Dec 2019 $49,431.00

NZ Racing Board (TAB) - Jan 2019 – Jul 2019 $5,964.74

Dragon Community Trust 0 Jan 2019 – Sep 2019 $1,500.00

Table 5: Total grants allocation to the Hauraki District with annual averages calculated

In the period between to Jan 2019 to December 2019, the biggest contributor to the organisations in the Hauraki District has been One Foundation, contributing 27% of the total grants. Grass Roots Foundation was close behind with 26% of total grants despite having half the amount of machines (15) as One Foundation and the Lion Foundation who both have the highest number of machines in the Hauraki District (30), and the Lion Foundation has contributed 22% of the total grants back into

37 This data was provided by PGFNZ of what was available for the 2019 year for published grants. Due to some grants periods falling across years this will not include some grants that will fall into either the 2018 or 2020 year. It also does not include grants that are from recipients that work across districts such as Thames Valley sports teams. This data should be considered as an overview only.

16

the District. The grants information for First Sovereign Trust is published up to September 2019 and therefore should have a larger contribution to Hauraki when the next grants are published. A total of $7,464.74 was granted to the Hauraki District from societies that do not operate machines in the District from January 2019 to December 2019. Importantly, the grants analysed above are grants made to organisations located in the Hauraki District. Those grants given to organisations that cover multiple districts or are national bodies, such as the National Heart Foundation or Search and Rescue, are not included. It is unclear how much benefit the Hauraki District derives from the grants made to both district and national organisations. Gaming machine proceeds vs. grants received

It is clear from the figures that the Hauraki District is not receiving its fair proportion of the gaming proceeds generated in the District. By law, 40% of gaming proceeds are required to be returned back to the community. This would indicate that based on the gaming machine proceeds in 2019 ($5.3 million) grants received by District organisations would be $2.1 million in 2019.

Risk to Māori

As noted, the Hauraki District has a high level of deprivation and a higher proportion of Māori than the national average. While it is impossible to determine the amount of funds being deposited into gaming machines by ethnic group, the Ministry of Health notes that Māori and Pacific populations are more likely to experience harm from at-risk gambling. The Problem Gambling Foundation grant figures show that around $7,783.97 (of a total $2.1 million) of grants were provided to Māori between January 2019 to December 2019. This indicates that for the level of risk to Māori, an extremely low level of grant funding is being provided to Māori organisations. Based on this information, it is likely that a large amount of gaming machine proceeds are being generated by our Māori community, and are not being returned to that community.

In 2019 the Hauraki District receive a total of $432,791 of grant funding, compared to the potential $2.11 million

available.

17

Figure 7: Gaming machine Trust grants allocated exclusively to the Hauraki District (January 2019 to December 2019)

$183,866.06

$75,822.82

$26,114.74

$22,093.00

$20,000.00

$20,000.00

$17,659.05

$15,495.00

$15,306.23

$7,783.97

$7,000.00

$6,106.00

$5,000.00

$4,141.00

$3,391.00

$1,513.05

$1,500.00

Education

Community Groups

Bowling

Other sports

Water sports

Cycling

Arts

Racquets

Kindergartens/Childcare/Plunket

Māori

Basketball

Cricket

Surf lifesaving clubs

Soccer

Netball

Community Services

Faith based

$0.00 $40,000.00 $80,000.00 $120,000.00 $160,000.00 $200,000.00

GAMING MACHINE GRANTS ALLOCATED TO THE HAURAKI DISTRICT

18

Social costs of Gambling Most people do not experience problems resulting from their gambling. However, for the minority that do develop a problem with gambling, the impacts can be far-reaching.

Problem gambling A problem gambler is someone whose gambling causes harm or may cause harm. ‘Harm’ is defined in the Gambling Act 2003 as being harm or distress of any kind arising from, or caused or exacerbated by, a person’s gambling. This includes personal, social, or economic harm suffered by the person; or their whānau, friends, employers, colleagues and whole communities. In addition, the PGFNZ states that:

Problem gambling refers to gambling that significantly interferes with a person’s life, especially with their finances, their job, and their relationships with partner, family, and friends. Pathological gambling is the most severe form and is classified as a mental disorder similar to drug abuse. It includes features of tolerance, withdrawal, diminished control, and relinquishing of important activities. At-risk gambling refers to a level of gambling that is not currently causing significant financial or emotional harm to the gambler, but is likely to become problem gambling if it continues. 38

The majority of people who seek help for their gambling problems do so because of non-casino gaming machines (i.e. those found in pubs). PGFNZ states that gaming machines (pokies) are the most harmful form of gambling in New Zealand which accounted for almost 50% of those seeking.39 The results from the Ministry of Health’s 2016 Health and Lifestyle Survey indicate a downward trend in the prevalence of problem gambling, but this trend does not achieve statistical significance. When taking into account population growth, the preliminary results indicate there has been no significant increase in the numbers of people who meet criteria for problem gambling.40 Although an Australian report identified that less than 15 percent of people impacted by gambling actually sort treatment through gambling services. Also often by the time people have reached out to gambling services they are at crisis point. Therefore, there are limitations to the information available on the full picture of problem gambling both nationally and locally.

Mitigating problem gambling There are a number of measures in the Gambling Act 2003 to minimise the harm caused by gambling41: • The purpose of the venue must not be primarily for gambling. • Venue staff receive problem gambling training (some training is provided by the Problem

Gambling Foundation) and must also take all reasonable steps to assist a person who they have ongoing concerns about.

• Venue staff must issue exclusion orders to self-identified problem gamblers. • The maximum bet per spin is $2.50; the maximum jackpot win is $1000.00.

38 (Problem Gambling Foundation of New Zealand, 2019) 39 (Problem Gambling Foundation of New Zealand, 2019) 40 (Department of Internal Affairs, 2017) 41 (Department of Internal Affairs, 2015)

19

• A pop-up appears at least every 30 minutes of continuous play and informs the player of the duration of their session of play, the amount of money the player has spent and net wins and net losses during the session of play.

• Non-casino gaming machine jackpot branding and advertising that is visible/audible from outside the venue is prohibited.

• Signage must be displayed encouraging players to bet at levels they can afford and contain advice on how to seek assistance for problem gambling.

The Department of Internal Affairs has noted that venues are doing better at helping problem gamblers but need to do much more. The Department conducted a mystery shopper in June 2017 to assess how well venue staff were fulfilling their Gambling Act obligations for preventing and minimising gambling harm. This was the third mystery shopper exercises completed, the first being in 2014 and the second in 2016. The exact location of the mystery shopper exercises is not revealed, however the exercise included societies who administer machines within the Hauraki District, including: • First Sovereign Trust Ltd • New Zealand Community Trust • The Lion Foundation (2008) • Grassroots Trust Ltd • Akarana Community Trust Trained researchers, displaying signs of harmful gambling, tested staff responses at 120 pokie bars and clubs and all six casinos. Indications of gambling harm include long hours of play, multiple cash withdrawals to play the pokies, verbal and non-verbal clues and third-party concerns. Staff would be expected to check in with such gamblers and advise on how they can get help or exclude themselves from gambling venues. Venues were rated on meeting a number of expectations for problem gambling prevention. Of the class 4 gambling venues assessed: • 12 out of 120 venue responses (10%) met the expectations. • 39 out of 120 venue responses (33%) met partial expectations. • 69 out of 120 venue responses (57%) did not meet

expectations42. The DIA noted there were pockets of good practice which largely came when strong signs of gambling harm were presented to staff. The exercise has shown some positive efforts by gambling operators but the results show there is a need for improvement. According to DIA Director of Gambling Compliance, Gareth Bostock “We are working with the sector to change the culture in venues, particularly in [class 4 gaming venues]. We expect bars to care as much about their gambling customers as they do their drinking customers.”43 The Department is using its latest mystery shopper research to target its regulatory activity and help the sector lift performance. It will tackle poor performing operators in particular through education and training in partnership with the Health Promotion Agency; inspect venues for harm minimisation practices; and use sanctions where appropriate.

42 (Department of Internal Affairs, 2017) 43 (Deparment of Internal Affairs, 2017)

Two out of every five regular gaming machine

users already have a gambling problem or are at risk of developing one.

20

Impacts of problem gambling Two out of every five regular gaming machine users already have a gambling problem or are at risk of developing one.44 Pokies have been described as the ‘crack cocaine of gambling’ largely because gambling can and does occur in a continuous and prolonged manner.45 Social harm from gambling can include, among other things, relationship breakdown, depression, suicide, reduced work productivity, job loss, bankruptcy, and various types of gambling-related crime (including family violence and crime committed to finance gambling). There are also ‘ripple effects’; that is, harms can and often do extend beyond gamblers to encompass family members, whānau, friends, employers, colleagues and whole communities. One in ten New Zealanders say a family member has gone without something they needed or a bill has gone unpaid because of gambling.46 There is compelling evidence from New Zealand and international research that at-risk gambling is associated with higher levels of smoking, hazardous alcohol consumption, other drug use, and poorer self-rated health. There has been debate whether these types of problems tend to lead to, or tend to be a result of, at-risk gambling.47 The Ministry of Health (MOH) is responsible for the funding and co-ordination of problem gambling services under the Gambling Act 2003. The MOH undertook a Strategy to Prevent and Minimise Gambling Harm 2019/20 to 2021/22 and provided the following information related to impacts of gambling: • One in five New Zealand adults (22%) is affected some time in their lives by their own gambling or

gambling of others. • In New Zealand in 2017, 37,000 people aged 15 or older were at high risk of harm from gambling

or are ‘problem gamblers’, • And about 47,000 were at moderate risk and a further 106,000 were a low risk but would

experience gambling related harm during their lifetime.48

Abuse and violence associated with problem gambling While most New Zealanders gamble without experiencing any apparent harm, a significant minority do experience harm from their gambling, including negative impacts of their own lives and the lives of others.49 In a study of family/whānau violence and abuse in problem gamblers, 50% of people seeking help for their own or someone else’s gambling were victims of physical, psychological, emotional, verbal or sexual abuse in the past 12 months. Slightly less than half (44%) of the participants committed violence or abuse at least once in the past 12 months. The study also concluded that “gamblers underestimated the negative effects of their gambling on family/whānau members, children and home life, which included financial problems, reduced quality of relationships, relationship strain and break-up, negative health effects, negative emotions, social deprivation and neglect.” Gamblers were more likely to commit financial abuse; affected others were more likely to be victims of financial abuse. Financial abuse related to being concerned about money, valuables or property going missing; having money taken from a purse/wallet or bank account without permission; being asked or forced to sign papers about money; or being forced to gamble for another person.50

44 (Problem Gambling Foundation of New Zealand, 2017) 45 (Marshall & Wynne, 2003) 46 (Problem Gambling Foundation of New Zealand, 2017) 47 (Department of Internal Affairs, 2016) 48 (Ministry of Health, 2019) 49 (Ministry of Health, 2019) 50 (Bellringer, et al., 2016)

21

Attitudes and perceptions around gambling New Zealander’s attitudes to different types of gambling vary. Generally, people’s attitudes regarding the number of gambling venues in New Zealand are divided, with a relatively equal number of people reporting that the number of venues is about right, compared with those reporting that there are too many venues.51 People are however, becoming more aware of problem gambling as a social issue, with increased media attention and news articles around problem gambling52 and problem gambling marketing campaigns from the Health Promotion Agency, including the national ‘Choice not Chance’ campaign. The aim of this campaign is to increase awareness of the early signs of harmful gambling. It encourages people to take action at an early stage – and asks them visit the website or call the Gambling Helpline.

Figure 7: Survey for Minimising Gambling Harm Education and Awareness Campaign from Choice Not Chance.

Problem gambling in the Hauraki District From the discussions held at the 2014 forum all parties involved felt that it is incredibly difficult to define and identify a problem gambler and even more to ascertain the numbers of gamblers in the Hauraki District. The intervention client data from the Ministry of Health represents the number of clients who have received problem gambling treatment services. Intervention services include: • national and local intervention and public health services • national helpline support (Gambling Helpline) • national co-ordination services • national workforce development services • national social marketing services (e.g. Choice not Chance) • national and local research projects. 51 (AUT Gambling & Addictions Research Centre, 2012) 52 https://www.tvnz.co.nz/one-news/new-zealand/more-kiwis-using-internet-gamble-online-sales-surge (February 2020) https://www.stuff.co.nz/business/industries/115129052/new-zealanders-are-pouring-money-into-online-gambling (August 2019) https://www.newshub.co.nz/home/politics/2019/06/fight-against-problem-gambling-to-focus-on-m-ori-pacific-and-asians.html (June 2019)

22

Figure 8: Total number clients assisted in the Hauraki District: Ministry of Health

2014 Hauraki gambling forum The Council held a forum on 31 March 2014 in order to discuss gambling in the Hauraki District. At the forum, the following organisations were represented: • Hauraki District Council • Ohinemuri Club • Work and Income New Zealand (WINZ) • Waihi Community Resource Centre • New Zealand Community Trust (NZCT) • Population Health (Waikato DHB) • The Salvation Army

• New Zealand Racing Board (NZRB) • Department of Internal Affairs (DIA) • The Lion Foundation • CAPS Hauraki • Problem Gambling Foundation of New

Zealand (PGFNZ), and • First Sovereign Trust Limited.

At the forum almost every represented party expressed their views on problem gambling in Hauraki. There was clearly an understanding from both the health and social service providers and the trust and venue operators that problem gambling was an issue. The size of the issue was a more contentious topic, alongside the question ‘how do we identify a problem gambler?’. PGFNZ noted concern that although machine numbers have remained constant in Hauraki, the expenditure has increased. “This is not the highest in New Zealand, yet it is up there.” This trend is visible in the most recent figures provided in Figure 3.The representative for PGFNZ also noted that not all of the money being spent on gaming machines within Hauraki is coming back to the district. The approach of the PGF is grant money would have been better off spent in the local businesses rather than on gambling and then granted back. Only a small portion of the actual gaming machine spending is from ‘out of towners’, so this money was originally in the community and could have saved a lot of unnecessary hardship. While documented intervention numbers are low, at the 2014 forum PGFNZ suggested that the Council needs to be mindful of the horror stories that are out there. Due to shame and other factors, many problem gamblers are hidden in communities and there are a lot of incidents that remain

1

3

67

4

12

7

431

1

1

2

2

2

3

0

1

2

3

4

5

6

7

8

9

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Problem gambling interventions in the Hauraki District (including brief interventions)

New clients Existing clients

23

unseen. This was acknowledged by Population Health (Waikato DHB) who contested it is dangerous to focus on the number of people presenting for help.53 The only venue holder represented at the forum was the Ohinemuri Club. When asked about the size of the problem they believed they had within their venues, the representatives responded that they felt they “didn’t see the ‘typical’ problem gamblers, largely due to the nature of their members, an older age bracket who have independent children and a generally sound financial situation”. They also noted that “If they have the money to spend, what is the problem?”. The representatives did say that they “get the odd occasion where a widowed person may spend more time on the machines and become slightly addicted due to loneliness and this is noted with support provided.” Mr McKernan, the owner of the Rob Roy Hotel in Waihi provided written feedback to the Council in 2014, outlining that due to the struggling economy, legislative changes introducing sinking lid policies and other various social drivers, there has been a downward trend in relation to gaming within his venue:

“The 2009-2013 gaming numbers and weekly banking has constantly reduced to around 70% of pre-2004 figures… Since 2009 I have only trespassed 1 gaming patron but the self-exclusion numbers are averaging 1 or 2 per year. Some of the gaming patrons are also self-limiting the amount they obtain by EFTPOS transactions.” “The end result of this issue is indicating at my venue fewer problem gamblers out of a far fewer proportion of gamblers...There will always be problem gamblers whether it is also lotto or TAB machines. The other outcome of the gaming reductions is far lower community funding available to be allocated.”

The Salvation Army representative advised that of the many people they see and regularly work with, most of them identify that gaming machines are a significant issue. “There is a problem”. Out of around 40 people that are receiving help from the Salvation Army in Waihi alone, more than 50% could see damage in their family partly because of gambling. To answer the question ‘how do we know there is a problem?’ Work and Income suggested that a problem exists “where the person is spending money when it should be spent on rent, power and food. The harm from this to families’ needs to be minimised at a grassroots level.” NZCT stated that AUT research has shown that around three quarters of those seeking help for gambling addiction have had significant improvements or had resolved their issues within 12 months of seeking help. As noted in the above mitigation measures, all venue staff receive problem gambling training. At the 2014 forum, the Problem Gambling Foundation, who provides and attends some of this training noted feedback from these training sessions from “the very staff whom we trust and expect will speak with people displaying signs of a problem gambler” included: “I didn’t start working in the pub to monitor people gambling. I’m there to pour beer” “I’m not a counsellor” “What if they have got enough money to spend on pokies?” “Isn’t it their choice what they spend their money on?” “I’m too busy with other priority work especially on Thursdays to Saturdays”

53 (Hauraki District Council, 2014)

24

These comments appear to be confirmed with the results of the Department of Internal Affairs mystery shopper exercise carried out in 2016.54

2017 stakeholder feedback received Stakeholders were contacted by letter and asked for feedback on what trends are being seen in our local communities in regard to gambling and harm from gambling. Feedback was received from: • Waihi RSA • Salvation Army Oasis Centre (Gambling

Support) • Hauraki Māori Trust Board • NZ Racing Board

• The Lion Foundation • CAPS Hauraki • Paeroa Ministers’ Association • Paeroa Golf Club • Akarana Community Trust

The following feedback was received, and has been grouped by subject. Current policy

The NZ Racing Board noted that in light of the regulations now in place, the status quo cap of 69 machines is entirely appropriate. Both the NZ Racing Board and the Akarana Community Trust noted that the adoption of a more restrictive policy is unlikely to reduce problem gambling, but will reduce local community funding opportunities, and may encourage people to seek out other forms of gambling, including offshore-based internet and mobile phone-based gambling. This form of gambling lacks the regulation that gaming machines have, is easily accessible and provides no return to the local community and no contribution to employment, taxation and health services in New Zealand. Akarana Community Trust also noted that a more restrictive policy is not necessary in light of the significant mitigation measures in place to minimised the harm from gaming machines. The Waikato DHB representative noted that the class 4 gambling spend is lower in the district and believes this reflects the collective sinking lid policy effectiveness. The Salvation Army representative noted that they support the current policy approach of a sinking lid. Venue responsibility

The Salvation Army noted that one of the biggest issues is that hosts are not meeting their host responsibilities in identifying and excluding problem gamblers. The Waihi RSA noted that it takes problem gambling seriously and has recently employed an external company to carry out harm minimisation training and compliance to provide training to staff so they are best equipped to address issues if they arise. Problem gambling and harm from gambling

The Paeroa Ministers’ Association (representing the Anglican, Baptist, Brethren, Catholic, Co-Operating and Elim churches) noted that it believes there is a problem with gambling in the Hauraki District, and that the Salvation Army is counselling a number of people in Paeroa for problem gambling. However, it notes that the churches represented have not had any people seek help directly from them.

54 (Department of Internal Affairs, 2017)

25

The manager of Waihi RSA advised that he has not seen evidence of problem gambling at their venue and has had no problems arising regarding gambling behaviour. The RSA has had two instances of self-exclusions in the past two years. The Salvation Army noted that it currently has four clients that are visited every fortnight in Paeroa. They have seen serious financial and social harm caused to clients and their families, such as re-mortgaging homes and loss of assets to pay for gambling debt. Based on the number of clients and the severity of the problem they’re seeing; they believe there is an issue with gambling in the Hauraki District. The Waikato DHB noted that through its public health work that the numbers seeking help are a very low representation of those experiencing difficulty with class 4 gambling. The DHB also noted that it often has trouble getting good information on who in the community is falling victim to class 4 gambling and the impact this has on whanau, community etc.

It’s a well-hidden problem and we know most people do not seek help until they are way down the line or committing crimes and being caught etc to fund their addictions. And of course the less money you have the quicker you will run out. It’s a very tricky situation.

CAPs Hauraki noted the following in regard to harm from problem-gambling:

The harm is not always apparent until it is too late and the problem has escalated to the hazardous/dependency end of the continuum. This means that the gambler has hidden their gambling and the resultant financial difficulties until they have been exposed by accident or because of obvious financial difficulties such as debt, insolvency, bankruptcy, theft as a servant, fraud or similar illegal activity. The resultant harm is likely to be marriage or relationship break up and family breakdown. This involves lawyers, court orders and sometimes protection orders. Where there is inter-partner violence, the woman will go to the pokie parlour to escape from tensions and the threat of violence in the home. For both men and women, resentments, power issues and family tensions prompt the use of gambling to excess to cover stress and trauma endured by individuals in their past.

The NZ Racing Board representative believes that the very low number of problem gambling presentations indicates that Hauraki District players are using the gaming machines responsibly. NZ Racing Board considers that “problem gambling associated with gaming machines is low, but problem gambling associated with offshore-based online gambling is growing exponentially.” Availability of services

CAPS Hauraki (a social agency for safe kids, thriving families) noted that the problem of getting help is considerable where there are no gambling counsellors available in the district. People have to travel to Hamilton or Manukau to receive help and the costs and time to do this are very often prohibitive

The situation I encountered was that a young man from Paeroa travelled up to Manukau once a week to see a counsellor in order to overcome the gambling problem and save his marriage. The number of sessions required for treatment varies but most typically is between six and eight. A woman from a small town in the district was unable to travel anywhere for assistance for a long term problem and used the gambling helpline ... She had four children and was very distressed but would not disclose to her G.P. about it. This is a typical response in a small town where people are fearful about being exposed in their communities.

26

The NZ Racing Board representative stated that it is easy to find out how to get help and that the help that is available is strongly promoted at all gaming venues, with prominent signage in the gaming room and easily accessible pamphlets located in each venue. Risk to Māori

Concern was raised by the Hauraki Māori Trust Board that echoes the information above regarding grant funding to Māori. As noted, Māori are at higher risk of experiencing harm from gambling and it is likely that there is a disproportionately small amount of funding being returned to Māori organisations. In addition to this The Salvation Army expressed concern that there is also no local dedicated gambling help service for Māori, Pacific and Asian clients – the closest is Whakatāne. Relocation policy

The Salvation Army representative noted that they do not support allowing relocation of venues as it would not support the sinking lid approach. NZ Racing Board and Akarana Community Trust asked that the Council considers providing for relocation in its Gambling Policy. NZ Racing Board noted that “when it is clear that the same business exists but has simply relocated a short distance, it is fair and reasonable for the policy to permit the venue to continue its current gaming machine operation.” Supporting reasons given for including relocation included: • removes entrenchment and gives venue owners the ability to move from undesirable locations

such as residential areas to more desirable areas such as the CBD and commercial zones, without losing their ability to host the same number of gaming machines.

• enables venues to move away from high-deprivation areas. • enables gaming venues to move to new, modern, refurbished premises. • allows local businesses to upgrade their premises and provide a more modern, attractive offering

to the public helps to revitalise business districts, improves the local economy and encourages tourism.

• prevents landlords demanding unreasonable rentals as it gives the venue operator the ability to relocate to an alternative venue.

• permits venues to re-establish after a natural disaster or fire. • venues can relocate from earthquake-prone buildings, • fairness in public works acquisition and lease termination. • allows venues to move away from large premises, with large car parking areas, where such land

may be better used for affordable high density housing. Grant distribution

NZ Racing Board noted that “funding from gaming machines is crucial to clubs’ operating costs and the Gambling Act 2003 seeks to balance the potential harm from gambling against the benefits of machines as a mechanism for community funding.” This was reinforced by the Akarana Community Trust’s feedback. The Waihi RSA noted that it gave grants of over $5000 in the past year, all going to local activities, such as the Waihi Football Association, Waihi Muay Thai Club, local darts and snooker, and Waihi College sporting and prize-giving activities. The Lion Foundation provided some examples of funding used within the Hauraki community from its gaming machine proceeds.

27

$20,000 grant to Perry Outdoor Education Trust, which paid the course fees for students form Waihi College to attend and enjoy one of New Zealand's top Outdoor Education courses. Cost is often a major barrier for students to take part in these programmes and The Lion Foundation was happy to help. A grant of $10,000 was provided towards Coastguard Northern Region to provide education and safety for local boaties. With the Hauraki waterways being used by thousands of people every year we are especially proud of this partnership. A grant of $10,000 to HELP Waihi towards the mulching operation along the Waihi Rail Trail Corridor, clearing the way for replanting and beautification of the area. With an estimated 25,000 users per year the Goldfields Railway has become an iconic part of Waihi. The Lion Foundation provided a grant of $30,000 towards the rebuilding of the Waitekauri Bridge.

On the receiving end, the Paeroa Golf Club noted that it has been most grateful for grants received from NZCT, Sovereign Trust, The NZ Racing Board and Trust Waikato over the period of the last three years. Without them the club notes that it would have struggled to maintain facilities as its membership numbers are low and cannot alone support the clubs operating expenses.

Conclusion This social impact assessment leaves little doubt that if a person is a ‘problem gambler’ the problem is real. Although it remains unclear how big the actual problem is within Hauraki, gambling is often an addictive recreational habit that puts homes and livelihoods at risk, impacting not only the gambler, but also friends and family. To summarise some key points: • Gambling is often a harmless form of entertainment, providing social opportunities as well as

creating employment opportunities for venues, societies, and servicing industries. • 67.2% of the adult New Zealand population had participated in some form of gambling during the

past year; which is an estimated 2,650,000 adults, this is keeping with the generally downward trend which has seen gambling participation decrease from 82.7% in 2006.

• Two out of every five regular gaming machine users already have a gambling problem or are at risk of developing one.

• The proceeds from gaming machines are not required to be distributed back into the same community in which they were generated.

• The total proceeds that came from Hauraki District gaming machines in 2019 available for community distribution was around $2.1million.

• Organisations in the Hauraki District received $432,791.92 (21% of the total GMP in Hauraki from 2019) of gaming society funding in 2019. Of this, around $7,464.74 was granted to the Hauraki District in 2019 from societies that do not operate machines in the District.

The most up to date statistics do not indicate that Hauraki has a disproportionate number of problem gamblers, and gambling venue society representatives and venue holders have noted that many people use gaming machines as their ‘social avenue’, that there was little to no problem gamblers using their venues and that the current use of gaming machines is in decline. However, observations by the social service organisations presented in both 2014 and in 2017 would seem to suggest that Hauraki does have a moderate problem.

28

While gaming machine associated grants are clearly a positive social impact of the gaming industry and the evidence above shows that organisations in Hauraki are receiving around 21% of the district proceeds, the amount ‘lost’ by gamblers in the Hauraki District is therefore disproportionate to the amount being injected back into Hauraki District communities. According to the Ministry of Health resource55, Hauraki District is profiled overall as ‘medium risk’ with a number of high risk factors in association with deprivation and having a higher proportion of Māori population. The recommended policy option from the Ministry of Health to suit a medium risk district is a policy with restricting locations or restricting locations and numbers of machines. This risk factor combined with the social impact information noted in this report would warrant a continued sinking lid policy approach from the Hauraki District Council.

55 (KPMG, 2013)

29

References

Abbott, M., Bellringer, M., Garrett, N., & Mundy-McPherson, S. (2014). New Zealand 2012 National Gambling Study: Overview and Gambling Participation. National Institute for Public Health and Mental Health Research, Gambling and Addictions Research Centre. Auckland: Auckland University of Technology. Retrieved June 2017

Aitken, D. (2020). Gambling Report with Grants & Analysis - Hauraki TLA. Problem Gambling Foundation of New Zealand (PGFNZ). Wellington: Problem Gambling Foundation of New Zealand (PGFNZ).

AUT Gambling & Addictions Research Centre. (2012). Brief Literature Review to Summarise the Social Impacts of Gaming Machines and TAB Gambling in Auckland. Auckland: Auckland University of Technology.

Bellringer, M., Palmer du Preez, K., Pearson, J., Garrett, N., Koziol-McLain, J., Wilson, D., & Abbott, M. (2016). Problem Gambling and Family Violence in Help-seeking Populations: Co-occurence, Impact and Coping. Gambling and Additions Research Centre, Centre for Interdisciplinary Trauma Research. Auckland Univerity of Technology. Retrieved June 2017

Deparment of Internal Affairs. (2017, June 28). Gambling venues need to do more. Retrieved from Department of Internal Affairs: https://www.dia.govt.nz/press.nsf/d77da9b523f12931cc256ac5000d19b6/33178cc3fee95905cc25814d0014f453!OpenDocument

Department of Internal Affairs. (2015, August). Fact Sheet #6: Gambling Harm Prevention & Minimisation. Retrieved from Department of Internal Affairs: https://www.dia.govt.nz/diawebsite.nsf/Files/Gambling-Fact-Sheets-Aug2015/$file/FactSheet6-August2015.pdf

Department of Internal Affairs. (2015, November 18). Gambling Fact Sheet #12: Territorial Authoirties and Class 4 Gaming Machine Numbers. Retrieved from Department of Internal Affairs: https://www.dia.govt.nz/diawebsite.nsf/Files/GamblingFactSheets-18Nov2015/$file/FactSheet12-18Nov2015.pdf

Department of Internal Affairs. (2015). Guide: Pokies in New Zealand - A guide to how the system works. Wellington: Department of Internal Affairs.

Department of Internal Affairs. (2016). Gambling Fact Sheet #22: Class 4 Financial Information. Wellington: Department of Internal Affairs.

Department of Internal Affairs. (2016, October). Gambling in Pubs and Clubs (Class 4). Retrieved July 4, 2017, from The Department of Internal Affairs: https://www.dia.govt.nz/diawebsite.nsf/Files/Pokie-system-101-untracked/$file/Pokie-system-101-untracked.pdf

Department of Internal Affairs. (2016). Regulatory Impact Statement: Problem Gambling Levy for 2016/17 to 2018/19. Wellington: Department of Internal Affairs.

Department of Internal Affairs. (2017, June). Gambling machine mystery shopper exercise 2017. Retrieved from Deparment of Internal Affairs: https://www.dia.govt.nz/Gambling-machine-mystery-shopper-exercise-2017

Department of Internal Affairs. (2017, April 20). Pokie spending patterns continue. Retrieved from Department of Internal Affairs: https://www.dia.govt.nz/press.nsf/d77da9b523f12931cc256ac5000d19b6/49a730564b03eb12cc25810800180078!OpenDocument

Department of Internal Affairs. (2017, March 31). Summary of Expenditure by Territorial Authority/District . Retrieved from Department of Internal Affairs: https://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Resource-material-Information-We-Provide-Summary-of-Expenditure-by-Territorial-AuthorityDistrict

Department of Internal Affairs. (2020, March 1). Gamblers spent $49 million more in FY 2017/18. Wellington, New Zealand. Retrieved June 2017, from

30

https://www.dia.govt.nz/diawebsite.nsf/wpg_URL/Services-Casino-and-Non-Casino-Gaming-News-Press-Releases-&-Consultation?OpenDocument#one

Department of Internal Affairs. (2020). Pokie Machines Club and Non Club Data for Hauraki District Council Territorial Area.

Ferris, J., & Wynne, H. (2001). The Canadian Problem Gambling Index: Final report. Ottawa: Canadian Centre on Substance Abuse.

Hauraki District Council. (2014). Social Impact Assessment of Gambling in the Hauraki District. Paeroa: Hauraki District Council.

Health Promotion Agency. (2020, March 9). Health and Lifestyles Survey. Retrieved from Health promotion agency : https://www.hpa.org.nz/tags/health-and-lifestyles-survey

KPMG. (2013). Gambling Resource for Local Government. Wellington: Ministry of Health. Kristensen, K. (2013). Class 4 Gambling: A briefing paper. Hamilton: Waikato District Health

Board. Marshall, D., & Wynne, H. (2003). Fighting the odds? Canada: Statistics. Ministry of Health. (2009). Problem Gambling Resource for Local Government. Wellington:

Ministry of Health. Ministry of Health. (2019). Strategy to Prevent and Minimise Gambling Harm 2019/20 to

2021/22. Wellington: Ministry of Health. Ministry of Health. (2019). Strategy to Prevent and Minise Gambling Health 2019/20 to

2021/22. Wellington: Ministry of Health. New Zealand Racing Board. (2018). Annual Report 2018. Wellington: New Zealand Racing

Board. Problem Gambling Foundation of New Zealand. (2009). Older Adults and Problem Gambling.

Problem Gambling Foundation of New Zealand. Problem Gambling Foundation of New Zealand. (2017, March). Fact Sheets: Gambling in New

Zealand. Retrieved from Problem Gambling Foundation of New Zealand: https://www.pgf.nz/uploads/7/1/9/2/71924231/fs01-gambling_in_new_zealand.pdf

Problem Gambling Foundation of New Zealand. (2019, December). Fact Sheet: Gambling in New Zealand. Retrieved from Problem Gambling Foundation: http://www.pgf.nz/uploads/7/1/9/2/71924231/fs_01_gambling_in_new_zealand_-_december_2019.pdf

Rook, R. P. (2018). Gambling Harm Reduction Needs Assessment. New Zealand: Sapere Research Group.

Stats NZ. (2020, March 9). 2018 Census place summaries - Hauraki District. Retrieved from Stats NZ: https://www.stats.govt.nz/tools/2018-census-place-summaries/hauraki-district

Storer, J., Abbott, M., & Stubbs, J. (2009). Access of adaptation? A meta-analysis of surveys of problem gambling prevalence in Australia and New Zealand with respect to concentration of electronic gaming machines. International Gambling Studies.

Tu, D. (2014, January 21). New Zealanders’ Participation in Gambling. Retrieved from Health Promotion Agency: http://www.hpa.org.nz/research-library/research-publications/new-zealanders%E2%80%99-participation-in-gambling

Appendix A - Venue locations: NZ Deprivation Index 2013 – Ward and District